But even after the correction, the Chinese stock market is up some 40 percent this year alone, boosted by heavy investment by retail investors and monetary easing from China's central bank.

"We're cautious on Chinese equities, which we think is a bubble which is bursting real-time here," Stewart Richardson, chief investment officer at RMG Wealth Management, said on CNBC's "Worldwide Exchange."

Richardson said the Chinese market had "all the hallmarks" of a bubble—a rally driven by retail investors and valuations at more extreme levels than in the U.S. tech sector in 2000, just before prices fell sharply.

"We're beginning to see some price action—we're down 13 percent on the major indices last week. We've seen a bit of a bounce, then more selling coming in. Chinese stocks could pretty much halve from where they are today," he said.